Info
Warning
Danger

Study Resources (Accounting)

62.Smith Corporation had 30,000 shares of common stock outstanding during the year. In addition, there were compensatory share options to purchase 3,000 shares of common stock at $20 a share outstanding the entire year. The average market price for the common stock during the year was $36 a share. The.
15 Views
View Answer
86.Rutger was organized at the beginning of 2016. It had the following income items for the year ended December 31, 2016: Sales $10,000,000 Gain on sale of assets 250,000 Unrealized gain available for sale securities 140,000 Unrealized gain on trading securities 100,000 Cost of goods sold 5,000,000 Operating expenses 4,000,000 As a new company, Rutger issued 50,000 shares of $1 par common stock.
6 Views
View Answer
130.Baltimore Bike had outstanding 12,000 shares of $50 par callable preferred stock. The corporation called 35% of the shares (originally issued at $75 per share) at a call price of $80 per share. ? Required: ?Record the journal entry for the call of this preferred stock. 131.Several years ago, Walther, Inc. issued 12,000 shares.
5 Views
View Answer
42.Which of the following items would not be included in a basic earnings per share calculation? a. undeclared dividends on noncumulative preferred stock b. declared dividends on noncumulative preferred stock c. undeclared dividends on cumulative preferred stock d. declared dividends on cumulative preferred stock 43.On January 1, 2016, Wade Corporation had 24,000 shares of common stock outstanding. On April.
5 Views
View Answer
192.There are two ways, conceptually, that can be used to account for convertible debt. However, only one of them is acceptable under GAAP.Required:Identify the two methods that could be used to record convertible debt and indicate which one is acceptable under GAAP. 193.How do the classification requirements of IFRS for instruments.
10 Views
View Answer
21.Which of the following types of corporations is owned or operated by a government unit? a.domestic b.private c.closed d.Public 22.A corporation whose stock is traded on a stock exchange is called a(n) a.foreign corporation. b.open corporation. c.domestic corporation. d.closed corporation. 23.Smith Corp. has both Class A and Class B shares of common stock. The difference between the two classes of.
6 Views
View Answer
52.On January 1, James Corporation had 60,000 shares of common stock outstanding. On March 1, the company reacquired 12,000 shares, and it declared a 10% stock dividend on October 1. What is the denominator in the earnings per share calculation? a. 44,200 b. 40,800 c. 55,000 d. 60,000 53.On January 1, Buchanan Corporation had 50,000 shares of common stock.
8 Views
View Answer
112.Listed below are various classifications of corporations. Following the list is a series of descriptive statements. a. public corporations e. stock companies b. open corporations f. foreign corporations c. domestic corporations g. closed corporations d. nonstock companies ? ____ 1. Companies that do not issue stock or operate for profit. ____ 2. As viewed by a state, companies operating within that state that are incorporated in another state. ____ 3. Companies that do not.
9 Views
View Answer
51.When a company carries out a stock split, the company usually a.receives less cash than market value. b.receives more cash than market value. c.issues more shares of stock. d.retires shares of stock. 52.A noncompensatory share purchase plan is designed to a.provide additional compensation to key officers and employees within the corporation. b.obtain more widespread employee ownership of.
36 Views
View Answer
1.When a property dividend is declared, fair value is determined on the ex-dividend date. a. True b. False 2.A small stock dividend is accounted for by transferring from retained earnings to contributed capital an amount equal to the par value of the additional shares issued. a. True b. False 3.A board of directors may decide to restrict retained earnings to.
25 Views
View Answer
138.Given the following information for Jumping Johns Bounce Company: Bonds payable $150,000 Common stock 25,000 Premium on preferred stock 19,000 Long-term investments in equity securities held for sale 10,000 Preferred stock subscribed 32,000 Retained earnings 53,500 Premium on common stock 38,460 Common stock subscribed 2,800 Subscriptions receivable: preferred stock 17,000 Premium on bonds payable 4,000 Preferred stock 55,000 Temporary investments in equity securities held for sale 25,000 Subscriptions receivable: common stock 15,600   Required:Compute the total amount of.
7 Views
View Answer
96.Green Thumb, Inc. had 18,000 shares of common stock outstanding on January 1. An additional 6,000 shares were issued on May 1. The company also had 1,000 shares of 5.5%, $100 par, convertible preferred stock outstanding during the year. Each share is convertible into 8 shares of common stock. Net.
22 Views
View Answer
72.For a compensatory share option plan, a formal journal entry or entries would be required for which of the following dates? Issuance of Share Options on the Issuance of Stock on Grant Date the Exercise Date I. Yes Yes II. Yes No III. No No IV. No Yes ? a. I b. II c. III d. IV Exhibit 15-5 On January 1, 2016, Roberts Company adopts a compensatory share option plan and grants 40 executives 1,000 shares each.
9 Views
View Answer
82.For share appreciation rights (SARs) compensation plans where the employee is expected to receive cash on the exercise date, the account that is credited in the year-end adjusting journal entry to recognize the compensation expense is a. Deferred Compensation. b. SAR Compensation Payable. c. Common Stock Option Warrants: SARs. d. Compensation Expense. ?Exhibit 15-8 On January 1, 2016, Margarita Company.
71 Views
View Answer
94.During 2016, Stewart, Inc. had the following convertible securities outstanding: A. $220,000 of 10%, $100 par, cumulative preferred stock. Each share is convertible into 5 shares of common stock. B. $200,000 of 9.5% convertible bonds. Each $1,000 bond is convertible into 45 shares of common stock. C. $100,000 of 8% convertible bonds. Each $1,000 bond is.
4 Views
View Answer
119.Consider each situation for Kathy, Inc. below independently. ? · Kathy, Inc. issued 10,000 shares of its $25 par common stock (current fair value of common is $35 per share) for a large tract of land. The land was appraised at $400,000. Kathy already had 500,000 shares of common stock outstanding. · Kathy, Inc. issued.
10 Views
View Answer
115.During 2016, Goodfellow has the following transactions involving its common and preferred stock: a. Issued 15,000 shares of $5 par common stock for $15 a share. This brings total shares outstanding to 50,000 sharesand 100,000 shares are authorized. b. Issued 5,000 shares of $100 par, 6%, cumulative preferred stock for $121 per share. c. When the.
9 Views
View Answer
173.Sand Castle Co. borrowed $40,000 by issuing a four-year non-interest-bearing note to a customer. In addition, Sand Castle agreed to sell inventory to the same customer at reduced prices over the four-year period. Sand Castle’s incremental borrowing rate was 8%, so the present value of the note was $29,400. The.
9 Views
View Answer
134.Advance Medical Imaging, Inc. reacquired 2,000 shares of its $5 par common stock at $15 a share. The stock originally sold for $10 a share.Required: a. Prepare the journal entry to record the reacquisition under the (1) cost method (2) par value method b. Prepare the journal entry to record the reissuance of 500 shares at $18 a.
17 Views
View Answer
188.What is the primary difference between a debtor’s and creditor’s accounting for a modification of terms in a troubled debt restructuring? 189.Companies can raise additional capital either by issuing bonds or by selling common stock. And investors can buy either bonds or common stock as a way to earn additional revenue..
7 Views
View Answer
102.Under the cost method of accounting for treasury stock transactions, when the proceeds from a sale are greater than the cost, the excess over cost is treated as a(n) a. increase in Other Expenses from Treasury Stock Sales. b. increase in Additional Paid-in Capital from Treasury Stock. c. increase in a contra-shareholders' equity account. d. None of these.
9 Views
View Answer
149.List four componentsthat comprise a corporation’s contributed capital. 150.Corporate shareholderscan only lose the amount of their investment, in accordance with the concept of limited liability. State laws have established protection for a corporation's creditors with the concept of legal capital. ? Required: ?Explain how legal capital protects a corporation's creditors and discuss two different.
6 Views
View Answer
92.Major Corporation had 50,000 shares of common stock outstanding during 2016 with the following characteristics: Par value per share $10 Average market value per share 50 Market value per share on 12/31/2016 60 The company also has compensatory share options to purchase 5,000 shares of common stock at $40 a share during the year. The unrecognized compensation.
4 Views
View Answer
61.Which of the following share option plans would involve the creation of a liability account over the life of the plan? a.all share option plans b.fixed compensatory share option plans c.performance-based compensatory share option plans d.share option plans with stock appreciation rights 62.Which of the following should normallybe accounted for under the fairvalue method? a.share option.
7 Views
View Answer
12.When a company is determining its dividend policy, the company must adhere to legal requirements. The legal requirements are determined by a. theFinancial Accounting Standards Board (FASB). b. thestate in which the company was incorporated. c. theSecurities and Exchange Commission (SEC). d. theFederal Trade Commission (FTC). 13.How will a company's retained earnings and total stockholders' equity be affected by.
11 Views
View Answer
82.Johnson Company has retained earnings balance of $550,000 at the end of 2016. During 2016 Johnson issued $200,000 of 10 year, 10% bonds. As part of the bond issue the each year $20,000 of retained earnings will be unavailable to pay dividends. Required: Show the proper reporting requirements for Johnson’s retained earnings.
6 Views
View Answer
128.On January 1, 2016, Robertson Company created a fixed compensatory stock option plan for employees to acquire 18,000 shares of $3 par common stock for $22 a share. The options vest after four years of employment, and therefore, they cannot be exercised until January 1, 2020. On the grant date,.
5 Views
View Answer
152.U.S. GAAP and IFRS utilize similar accounting for shareholders’ equity but there are some differences. ? Required: Explain the differences between U.S. GAAP and IFRS in their accounting for shareholders’ equity. 153.Current GAAP recommends that the fair value method be used to account for compensatory stock option plans. From a conceptual point of view,.
11 Views
View Answer
180.Define the following characteristics of bonds: Debenture bonds Mortgage bonds Zero-coupon bonds Callable bonds Convertible bonds Serial bonds 181.How is the stated interest rate on the bond different from the effective rate? What can cause the difference between the two rates? 182.?How is the issue price for a bond determined? What are the three alternative states of the.
7 Views
View Answer
41.Refer to Exhibit 15-2. Lawrence received final payment (80%) on 1,800 shares and issued those shares. Subscribers defaulted on 200 shares. The entries to record receipt of final payment and issuance of 1,800 shares would include a a.debit to Cash for $24,000. b.credit to Subscriptions Receivable: Common Stock for $24,000. c.debit to Common.
8 Views
View Answer
136.A partial listing of accounts and ending balances for Carver, Inc., on December 31, 2016, is shown below: Investments in long-term notes receivable $ 40,000 Bonds payable 300,000 Temporary investment in equity securities available for sale 120,000 Premium on bonds payable 26,000 Common stock 180,000 Subscriptions receivable: common stock 120,000 Additional paid-in capital from preferred stock conversion 24,000 Retained earnings 650,000 Preferred stock 300,000 Long-term investment in equity securities.
7 Views
View Answer
11.Noncumulative preferred stock is entitled to all dividends, even if they are in the arrears. a.True b.False 12.Fully participating preferred shareholdersreceive extra dividends equally with therate ofcommon shareholders. a.True b.False 13.Companies can reacquire their own stock to reduce the likelihood of a hostile takeover. a.True b.False 14.Treasury stock does not vote, has no preemptive rights, cannot participate in dividends,.
10 Views
View Answer
125.On January 1, 2016, Asquith Company adopts a performance-based stock option plan with a four-year vesting and service period, a $35 exercise price, and a $6 per option fair value. The plan grants a maximum of 2,000 shares of $5 par common stock to each of the company's 30 executives..
7 Views
View Answer
88.West, Inc. determined the following information concerning its common stock during 2016: January 1 80,000 shares outstanding April 1 Issued a 20% stock dividend July 1 Issued an additional 2,900 shares October 1 Issued a 2-for-1 stock split December 1 Reacquired 5,000 shares ? Required:What should West, Inc. use as the denominator for its basic earnings per share calculation for 2016? 89.On January.
6 Views
View Answer
1.Accumulated other comprehensive income is not reported with shareholder’s equity. a.True b.False 2.An open corporation does not allow the sale of their stock to the general public, only to investment capital brokers. a.True b.False 3.Miscellaneous fees arising from the issuance of stock are charged to the organization expense account only if this is not the company’s.
15 Views
View Answer
176.Nassau Co. owes Dominion Ltd. $115,000 on a note payable, plus $7,500 interest. Dominion agrees to accept land in full settlement. The land is recorded on the books of Nassau at $55,600 and is currently worth $85,000. ? Required: ?Prepare the journal entries to record the debt settlement on the books of Nassau. 177.Cat’s.
9 Views
View Answer
102.What three items rarely affect retained earnings? 103.Other Comprehensive Income or loss might include what four items? 104.Describe the two types of corporate capital structures. 105.What is the basic earnings per share calculation? What is the weighted average shares calculation? 106.What are the steps necessary to compute diluted earnings per share? .
5 Views
View Answer
31.Which one of the following phrases is least desirable when describing an amount received from a sale of stock in excess of the par value of the stock? a.paid-in capital in excess of par value b.capital surplus c.additional paid-in capital on preferred stock d.contributed capital in excess of par value 32.The authorized shares of capital.
8 Views
View Answer